2013.04.1903:07:00UTC+00Canadian Dollar exchange at almost 1-month low before G-20 meeting

The Canadian dollar exchanged at almost a one-month low before a Group of 20 assembly that may offer clues about measures by central banks to jump-start economic progress.

The loonie, as the currency is nicknamed, was little changed versus its U.S. counterpart after paring gains earlier today. The G-20 finance ministers and central bankers meet for two days in Washington beginning today, before weekend talks at the International Monetary Fund and World Bank. A draft statement prepared for the group’s meeting maintains a February pledge to “move more rapidly toward more market-determined exchange rate systems and exchange-rate flexibility,” Bloomberg BNA reported.

“The market certainly wants to see what the G-20 brings and how aggressive the tone will be to foreign-exchange rates,” Dean Popplewell, head analyst in Toronto at the online-currency- trading company Oanda Corp., said in a phone interview. “Central banks are looking for positive growth and sustainable growth. At the moment, there’s not a global conviction in the trend.”

The Canadian dollar moved a notch at C$1.0264 per U.S. dollar at 5 p.m. in Toronto, after boosting earlier to C$1.0230. It touched C$1.0294 yesterday, the worst state since March 13. One loonie purchase 97.43 U.S. cents.

Technical Levels

George Davis, chief technical analyst in Toronto at Royal Bank of Canada’s RBC Capital Markets unit, advised clients to sell the Canadian dollar at levels weaker than C$1.0285.

“An hourly close above this level would pave the way for further gains toward C$1.0315, with a further rally exposing resistance in the C$1.0340 area,” Davis said in a research note. “Place a tight stop below C$1.0192 on an hourly closing basis.” A stop is an order set to be executed when an asset reaches a predetermined price.

Trading in the loonie suggests it won’t reach parity with its U.S. counterpart in the near-term, last attained on Feb. 7, Oanda’s Popplewell stated.

“The Canadian dollar will struggle to make its way towards parity,” he said. “Commodities are still under pressure --that will always be a worry for the Canadian dollar.”

Crude oil, the nation’s biggest export, advanced 1.9 percent to $88.34 a barrel in New York, paring a 10 percent loss this month. The Standard & Poor’s 500 Index dropped 0.7 percent while the S&P/TSX Composite Index, the benchmark Canadian equity gauge, boosted 0.4 percent.

Bonds Increase

Canada’s benchmark 10-year government bonds advance, with yields falling one basis point, or 0.01 percentage point, to 1.70 percent. The 1.5 percent security maturing in June 2023 acquired 7 cents more to C$98.13.

The Bank of Canada declared plans to sell C$3.3 billion ($3.2 billion) of two-year notes on April 24. The 1.5 percent securities will mature in August 2015.

Ten-year yields dropped yesterday to as low as 1.69 percent, the least since December, after Bank of Canada Governor Mark Carney also reduced his progress forecast for the year.

Derivatives point to four basis points of easing by the central bank’s final meeting of the year. As recently as January, the median forecast by economists called for a quarter-percentage point surge at the end of the year.

One day after the Bank of Canada held its policy interest rate at 1 percent, Carney said the nation’s housing market is moving in the right direction. The central bank’s policy report yesterday forecast household debt levels would stabilize.